KLC Testimony Highlights Need to Modernize Transportation Funding

Kentucky League of Cities (KLC) Director of Public Affairs Bryanna L. Carroll told the Interim Joint Budget Subcommittee on Transportation that the state needs safe and reliable streets and bridges to prosper. Local transportation funding will need to increase 2-3% just to maintain current levels.

Recent headlines about the American Rescue Plan Act (ARPA) describe federal monies headed for infrastructure projects, but the legislation only addressed water, sewer, and broadband. Onetime money, like ARPA, also does not address structural issues related to ongoing needs.

Carroll explained why lawmakers must address funding needs, which include a review of the motor fuels tax. “We are doing our best at the local level, but we are also revenue-limited,” she said. “The Constitution prevents us from raising revenue beyond a few ways such as, the occupational tax and property tax. We appreciate your support for us and trying to help our communities.”

While 55% of Kentucky’s population lives in a city, state and federal funds only provide about one-third of the current spending on city streets. Since 2009, Kentucky cities have spent 62% more on city streets, but state and federal funding declined more than 4%.

Fixing all current transportation needs in Kentucky cities would require approximately $75 million more in state funding annually. That figure is in addition to the $750 million Transportation Secretary Jim Gray testified that the Kentucky Department of Transportation needs to maintain and build state roads. Even more funding is required for onetime mega projects vital to cities, such as the Brent Spence Bridge.

Subcommittee Cochair Representative Sal Santoro (R-Union) said he knows that mayors of the cities he represents “hear it firsthand.” Santoro reiterated that the General Assembly and cities must work together to solve the problem.

The KLC Board of Directors will again look to the legislature to fix the state’s road funding shortage in the 2022 session. Additionally, city officials continue to point out the need to modernize the state’s antiquated road funding formulas. Kentucky has not updated how it divvies up the local portion of the gas tax since 1972, when the legislature created the municipal road aid program.

Subcommittee Cochair Senator Jimmy Higdon (R-Lebanon) acknowledged the need to recognize the challenges created by Kentucky’s lagging gas tax collection.

“Consumption has remained the same. Miles used is up. Fuel efficiency is much higher now,” he said. “Our formula has not kicked in and done anything to offset the inflationary increases we’ve had since 2015. If you wonder why we are having shortages, that’s the perfect storm.”